India, China petition WTO against trade-distorting farm subsidies

India and China have called for eliminating trade-distorting agricultural subsidies given by developed countries, in a joint proposal to the WTO, the Indian Commerce Ministry said on Thursday.

“India and China jointly submitted a proposal to the World Trade Organization (WTO) calling for the elimination – by developed countries – of the most trade-distorting form of farm subsidies known as Aggregate Measurement of Support (AMS), or ‘Amber Box’ support, as a prerequisite for consideration of other reforms in domestic support negotiations,” an official statement said here.

“The joint paper reveals that developed countries, including the US, the EU and Canada, have been consistently providing trade-distorting subsidies to their farmers at levels much higher than the ceiling applicable to developing countries,” it said.

The proposal assumes importance in view of the ongoing negotiations for the ministerial conference of the WTO to be held in Buenos Aires in December.

“It counters the efforts by some countries to target the subsidies of the developing countries while letting the developed countries retain their huge farm subsidies,” the statement added.

The subsidies by the developed countries amount to around $160 billion. On the other hand, countries like India provide a subsistence amount of about $260 per farmer annually, the ministry said.

“Most of the developing countries, including India and China, do not have AMS entitlements,” it said.

It also said that subsidies for many items provided by the developed world are over 50 per cent and in some cases more than 100 per cent of the value of the production concerned, while developing countries are forced to limit it within 10 per cent of the value of production.

“In contrast, most developing members have access only to de minimis resulting in a major asymmetry in the rules on agricultural trade,” it added.

The proposal, submitted last month, argues that AMS have to be eliminated before any other reform in the global farm trade can be taken up for consideration.

It suggested that the US, the EU, Canada, Japan, Switzerland, and Norway have continued to distort global farm trade by safeguarding their exclusive entitlements on AMS which they had secured in the previous Uruguay Round of trade negotiations.